Wall Street targets can finally talk back

The SEC just surrendered its fifty-four-year power to silence the people it investigates. The financial regulator officially repealed its 1972 "gag rule"—the mandatory policy that forced anyone settling an enforcement case to promise they would never publicly dispute the government's accusations. This final rule ends that forced silence. Under the new setup, companies and executives can settle their cases without admitting wrongdoing, and then immediately tell the press or social media that the government's charges were complete garbage.

Corporate defendants and hedge funds win back their public relations departments. Since 1972, the SEC used the threat of tearing up a settlement to keep targets from defending their reputations in public. Wall Street targets routinely signed agreements on weak cases just to avoid catastrophic legal fees, only to find themselves permanently banned from criticizing the agency's evidence. By throwing out the rule, the SEC is conceding that its fifty-four-year-old policy was a speech-suppressing overreach. The agency is even walking away from the past: it announced it will stop enforcing these silence provisions on thousands of existing settlements already on the books.